Depreciation
Depreciation means a fall in the value of fixed assets. Due to its usage, obsolescence, and other sources. It is a process of allocation of the cost of fixed assets to the period of life not a valuation of the asset. Depreciation is charged on all tangible fixed assets. Depreciation is an expense that is debited to profit and loss account. It is a part of the cost of a fixed asset.
In the book of account
The amount of depreciation is based on mainly two methods. Which is below?
- Straight line method or fixed instalment.
- Written down value method or reducing instalment.
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